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A company purchases an asset that costs $20,000. This asset qualifies as three-year property under MACRS. The company uses an after-tax discount rate of 6%

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A company purchases an asset that costs $20,000. This asset qualifies as three-year property under MACRS. The company uses an after-tax discount rate of 6% and faces a 40% income tax rate. Use the appropriate present value factors found in Appendix C. Table 1, to determine the present value of the depreciation deductions for this firm over the specified four-year period. Refer to Exhibit 12.4. (Round "MACRS %" to 2 decimal places (.1234 = 12.34%), "PV factor" to 3 decimal places. Round your answers to 2 decimal places.) Year Depreciation Deduction Tax Savings Present Values 1 2. 3 4 TABLE1 Present Value of S1 4% 1 2 nun 0.705 0.317 0.261 Periods 5% 0% 9% 10% 11% 13% 14% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.925 0.907 0.990 0.873 0.857 0.842 0.826 0.812 0.797 0783 0.769 3 0.889 0.854 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.575 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 6 0.790 0.746 0.630 0.596 0.564 0.535 0.507 0.480 0.458 0.750 0.711 0.665 0.623 0.583 0.547 0513 0.482 0.452 0.425 0400 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 9 0.703 0.645 0.592 0.544 0.500 0460 0.424 0.391 361 0.333 0.308 10 0.676 0.614 0.558 0.508 0.463 0422 0.385 0.352 0.322 0.295 0.270 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 14 0.577 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 15 0.555 0.481 0417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 17 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 18 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 19 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0,098 0.083 20 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 22 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.058 0.056 24 0330 0.310 0.247 0.197 0.158 0.126 0.102 0.082 0.066 0.053 0.043 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 35 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.019 0.014 0.010 40 0.208 0.142 0.097 0.067 0.046 0.032 0.002 0.015 0.011 0.008 0.005 Note: The present Value (PV) factor for N period and rate per period - 1 + (1+1". For the factor for 10%, Sean = 1+(1+0.10 0.621 round). 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.083 0.081 0.070 0.061 0.046 0.035 0.030 0.015 0.008 0.004 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.018 0.013 0.010 0.004 0.002 0.001 0.800 0.540 0.512 0.410 0.328 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.007 0.005 0.004 0.001 0.000 0.000 30% 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.056 0.043 0.053 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.005 0.002 0.001 0.000 0.000 0.000 0.505 Year 3-year 5-year 7-year 10-year 15-year 20-year 1 2 3 33.33 44.45 14.81 7.41 20.00 32.00 19.20 11.52* 11.52 5.76 4 14.29 24.49 17.49 12.49 8.93* 8.92 8.92 4.47 5 6 7 8 9 10 11 10.00 18.00 14.40 11.52 9.22 7.37 6.55* 6.55 6.56 6.55 3.28 5.00 9.50 8.55 7.70 6.93 6.23 5.90* 5.90 5.91 5.90 etc. 3.75 7.22 6.68 6.18 5.71 5.28 4.89 4.52 4.46* 4.46 etc

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